ECF 12 Redacted

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

MILWAUKEE DIVISION

WILLIAM SCHMALFELDT, Case No. 2:15-cv-01516-NJ Plaintiff, v. SARAH PALMER, ET AL., Defendants.

MEMORANDUM OF LAW IN SUPPORT OF THE JOINT MOTION TO DISMISS AND

OPPOSITION TO LEAVE TO AMEND FILED BY DEFENDANTS SARAH PALMER AND ERIC JOHNSON

INTRODUCTION

As noted in the accompanying Joint Motion for Extension of Time to File a Motion to

Dismiss Under Rule 12(b)(6) and Motion for Leave to File a Separate Rule 12(b)(6) Motion to

Dismiss, the Plaintiff has filed two complaints: the original complaint (ECF No. 1) and a

proposed amended complaint (ECF No. 6) that has not yet been accepted by this Court.

Accordingly, at this stage of the litigation, these Defendants ask for the original complaint to be

dismissed, that leave to amend be refused, and that, consequently, this entire case be dismissed.

The original complaint should be dismissed by this Court for three reasons. First, this

Court lacks subject matter jurisdiction because the Plaintiff has chosen to include multiple

unknown parties, making it impossible for him to prove there is complete diversity of

citizenship. Second, there is no personal jurisdiction over Mr. Johnson and Mrs. Palmer (or any

other defendant). Third, the Plaintiff has failed to properly serve either Mr. Johnson or Mrs.

Case 2:15-cv-01516-NJ Filed 03/01/16 Page 1 of 15 Document 12

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Palmer. For each of these reasons, the original complaint should be dismissed under Fed. R. Civ.

P. 12(b)(1), (2), and (5).

Meanwhile, on February 4, 2016, the Plaintiff submitted an alleged amended complaint.

The Plaintiff clearly believed he was using his one free amendment under Fed. R. Civ. P.

15(a)(1)(A). However, as explained in the accompanying Joint Motion for Extension of Time

to File a Motion to Dismiss Under Rule 12(b)(6) and Motion for Leave to File a Separate

Rule 12(b)(6) Motion to Dismiss in paragraphs 3-6, the Plaintiff has not met the conditions to

amend the complaint as a matter of course under 15(a)(1)(A) or (B). Therefore, that amendment

can only be accepted by this Court if it grants leave to amend.

Such leave to amend should be denied. As stated in Moore v. State of Ind., 999 F.2d

1125, 1128 (7th Cir. 1993): [w]hile Rule 15(a) states that leave shall be freely given when

justice so requires, the court should not allow the plaintiff to amend his complaint when to do so

would be futile. The proposed amended complaint suffers from exactly the same failures of

subject matter and personal jurisdiction as the original complaint, and, therefore, if that proposed

amendment was accepted, it would inevitably be dismissed. Accordingly, this Court should deny

leave to file the proposed amended complaint because it is futile, andhaving dismissed the

original complaintdismiss the entire case.

I. THE AMENDED COMPLAINT SHOULD BE DISMISSED AND LEAVE TO AMEND

SHOULD BE DENIED BECAUSE THERE IS NO SUBJECT MATTER JURISDICTION

The Plaintiff has failed to allege that subject matter jurisdiction exists. Indeed, his

allegations destroy subject matter jurisdiction because he has included unknown defendants in a

diversity of citizenship suit.


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First, there is no federal question jurisdiction in this case, as is obvious on the face of the

original complaint. Every alleged cause of actionand many are not actually causes of action in

the first placeare based on either state common law or state statutory law. Therefore, subject

matter jurisdiction can only exist if there is diversity of citizenship, and that, in turn, requires the

Plaintiff to show there is complete diversity of citizenship. See, e.g., Howell by Goerdt v.

Tribune Entertainment Co., 106 F.3d 215, 217 (7th Cir. 1997).

Complete diversity of citizenship, however, cant be proven by the Plaintiff unless he

actually knows the names and whereabouts of every defendant. He does not, describing many as

simply as John Does and Jane Roes. Such ignorance is fatal to jurisdiction. [B]ecause the

existence of diversity jurisdiction cannot be determined without knowledge of every defendants

place of citizenship, John Doe defendants are not permitted in federal diversity suits. Id. at

218. Thus, his inclusion of unknown defendants in the original complaint destroys diversity

jurisdiction, justifying dismissal of that complaint.

Further, the Plaintiff has replicated his error in his proposed Amended Complaint. He

has again named several John Does and Jane Roes as defendants in his proposed complaint.

Therefore, for the same reason that the original complaint should be dismissed, accepting the

amendment is futile. As noted supra page 2, this Court can deny leave to amend based on such

futility.

Another difficulty the Plaintiff has in relationship to subject matter jurisdiction in the

original complaint is that the Plaintiff has failed to properly allege that the amount in controversy

exceeds $75,000 as required by 28 U.S.C. 1332 for each Defendant. In the original complaint,

the only attempt to put a monetary value on his damages is found a series of conclusory

allegations found in his Prayer for Relief (pp. 24-25), which cannot be credited by this Court.


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Further, the Defendant inappropriately aggregates those amounts. As stated in Middle Tennessee

News Co. v. Charnel of Cincinnati, 250 F.3d 1077, 1081 (7th Cir. 2001):

In diversity cases, when there are two or more defendants, plaintiff may aggregate the amount against the defendants to satisfy the amount in controversy requirement only if the defendants are jointly liable; however, if the defendants are severally liable, plaintiff must satisfy the amount in controversy requirement against each individual defendant.

The Plaintiff has only presented conclusory allegations suggesting any kind of aggregation is

appropriate. Such conclusory allegations are insufficient. The failure to allege more than

$75,000 against any one of these Defendants, therefore, is an additional reason to dismiss the

original complaint for lack of subject matter jurisdiction.

Once again, this mistake was also replicated in the proposed amended complaint. The

allegations that the Plaintiff has faced any damages at all are purely conclusory (to the extent that

they exist at all), rending this proposed amendment futile. For instance, in paragraph 31 of the

proposed complaint the Plaintiff asks for $100,000 for something called assumed damages,

apparently believing that in a libel per se case that not only he is entitled to presumed damages,

but they should be presumed to be over $75,000a position not supported by law. In the same

paragraph, he asks for $500,000 of punitive damages without having made any allegations

showing that he is entitled to such damages. The Plaintiffs only other attempt to claim damages

in the proposed amended complaint is found in paragraph 40, which relates to false light invasion

of privacy. Besides the fact that the claim of damages is conclusory, Wisconsin does not

recognize false light invasion of privacy. Ladd v. Uecker, 323 Wis. 2d 798, 780 N.W.2d 216,

221 (Wis. App. 2010); see also Zinda v. Louisiana Pacific Corp., 149 Wis.2d 913, 928-29 (Wis.

1989) (noting that the tort of invasion of privacy was created statutorily and that false light was

omitted from the statute). Therefore, the Plaintiff has failed to properly allege damages equaling


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more than $75,000 as required for subject matter jurisdiction. For all of these reasons, this Court

should dismiss the original complaint, deny leave to amend, and, consequently, dismiss the entire

case.

II. THE AMENDED COMPLAINT SHOULD BE DISMISSED FOR LACK OF PERSONAL

JURISDICTION

Wisconsins long-arm statute does not authorize the extension of personal jurisdiction

over Mrs. Palmer or Mr. Johnson in Wisconsin, and the extension of jurisdiction over these

Defendants would violate the Due Process clause of the Constitution. Accordingly, this Court

should dismiss the original complaint, deny leave to amend on the basis of futility, and dismiss

the entire matter.

First, as noted above, subject matter jurisdiction can only exist under diversity of

citizenship jurisdiction (or not at all), with the Plaintiff claiming residence in Wisconsin and

correctly alleging that Mrs. Palmer resides in North Carolina and Mr. Johnson lives in

Tennessee. In a diversity case, whether this Court can exercise personal jurisdiction any

defendant is determined by exactly the same standards as it would in any Wisconsin state court.

In other words, where Wisconsin state law controls the cause of action, it also controls

jurisdiction:

A federal court sitting in Wisconsin has personal jurisdiction over the parties in a diversity case only if a Wisconsin state court would have such jurisdiction. Klump v. Duffus, 71 F.3d 1368, 1371 (7th Cir.1995), cert. denied, [518 U.S. 1004], 116 S.Ct. 2523, 135 L.Ed.2d 1047 (1996). Therefore, this court must resolve two questions. First, it must determine whether the Wisconsin long-arm statute, WIS. STAT. 801.05, applies to Mr. Bulso [the defendant]. Mid-America Tablewares, Inc. v. Mogi Trading Co., 100 F.3d 1353, 1358-59 (7th Cir.1996); see In re All-Star Ins. Corp., 110 Wis.2d 72, 76, 327 N.W.2d 648 (1983). Second, if the long-arm statute does apply, the court must then decide whether its exercise of jurisdiction over Mr. Bulso comports with the due process requirements of the Fourteenth Amendment. Mid-America Tablewares, 100 F.3d at 1359; see In re-All Star, 110 Wis.2d at 76, 327 N.W.2d 648.


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Nelson v. Bulso, 979 F.Supp. 1239, 1242 (E.D. Wis., 1997). Further, the Plaintiff, as the party

seeking to establish personal jurisdiction, bears the burden of showing that such jurisdiction

exists. Lincoln v. Seawright, 104 Wis. 2d 4, 9 (Wis. 1981) (citing Schmitz v. Hunter Machinery

Co., 89 Wis. 2d 388, 396, (Wis. 1979)); see also Jennings v. AC Hydraulic A/S, 383 F.3d 546,

548 (7th Cir. 2004) (Once a defendant moves to dismiss for lack of personal jurisdiction ... the

plaintiff bears the burden of demonstrating the existence of jurisdiction). Neither the original

complaint, nor the proposed amended complaint cites to any provision of WIS. STAT. 801.05

supporting the Plaintiffs assertion of jurisdiction, and there are no facts in either complaint

supporting such jurisdiction. Further, even if jurisdiction was authorized by WIS. STAT.

801.05, it would violate the due process clause. Accordingly, the original complaint should be

dismissed for lack of personal jurisdiction, leave to file the proposed amended complaint should

be denied, and the entire case should be dismissed.

A. This Court Doesnt Have Personal Jurisdiction Over the Defendants Under WIS. STAT. 801.05

As noted in Nelson, the first step in determining whether a court sitting in a diversity case

has personal jurisdiction is to determine if any state law enables such jurisdiction. Plaintiff has

not designatedeither in the original complaint or the proposed amended complaintany part

of WIS. STAT. 801.05 that this case allegedly meets, and he has not alleged facts that would

allow this Court to determine that the statute had been met.


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The only provision of 801.05 that are worth examining at all is 801.05(1)(d), which

states the following:1

(1) LOCAL PRESENCE OR STATUS. In any action whether arising within or without this state, against a defendant who when the action is commenced ...

(d) Is engaged in substantial and not isolated activities

within this state, whether such activities are wholly interstate, intrastate, or otherwise.

The case law has established that whether such substantial ... activities exist is

determined by examining the following factors:

(1) the quantity of defendants contacts; (2) the nature and quality of defendants contacts; (3) the source and connection of the cause of action with those contacts; (4) the interests of Wisconsin in the action; and (5) the convenience to the parties of employing a Wisconsin forum.

Rasmussen v. Gen. Motors Corp., 335 Wis.2d 1, 15-16 (Wis. 2011).

1 None of the other subsections appear to be implicated even slightly on the facts as Plaintiff has alleged. For instance, neither of these Defendants were present in Wisconsin when they were allegedly served, as required under 801.05(1)(a). Neither them are domiciled in Wisconsin as required by 801.05(1)(b). Neither of them are corporations as required by 801.05(1)(c). No special jurisdiction statutes apply under 801.05(2). There is no allegation of a local act or omission required under 801.05(3), because Plaintiff never alleges where anyone is when he or she allegedly committed these alleged torts. See, e.g., Jefferson Electric, Inc. v. Torres, 09-C-465, 2009 WL 4884379 (E.D. Wis. Dec. 10, 2009) (Neither the receipt of communications within Wisconsin from a remote defendant, nor the sending of communications from Wisconsin to a remote defendant, constitute acts or omissions within this state by that defendant); see Pavlic v. Woodrum, 169 Wis.2d 585, 486 N.W.2d 533 (Wis. App., 1992) (holding that the act of sending allegedly fraudulent letters into Wisconsin from out-of-state did not constitute a local act under 801.05(3)); see also Rasmussen v. Gen. Motors Corp., 335 Wis.2d 1, 22 (Wis., 2011) (citing Woodrum with approval). Likewise, the Plaintiff has not alleged any solicitation or service activities carried on within Wisconsin as required by 801.05(4)(a), or that any [p]roducts, materials or things processed, serviced or manufactured by the defendant were used or consumed in Wisconsin as required by 801.05(4)(b). He is complaining about words, not tangible things. Similarly, there is no allegation related to local property that satisfies 801.05(6), there is no allegation of a deficiency judgment as required by 801.05(7), there is no allegation related to the Defendants allegedly being the director, officer or manager of a corporation, or an LLC as required by 801.05(8); this case doesnt relate to taxes, insurance, marriage, or a personal representative of a deceased under 801.05(9)-(12), respectively.


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In the case of Mrs. Palmer, there are no alleged contacts whatsoever with Wisconsinall

of her alleged activities consist of writing on the Internet to a general audience, see Declaration

of Sarah Palmer attached as Exhibit Aand, therefore, the first two factors counsel against

recognizing jurisdiction. Further, since there are no contacts with Wisconsin, there is no

connection between such non-contacts and the cause of action, and, therefore, the third factor

counsels against personal jurisdiction. Likewise, Wisconsin has no valid interest in regulating

the expression of persons that occur outside its borders, and, therefore, the fourth factor favors

Mrs. Palmer.

Finally, convenience favors Mrs. Palmer. Mrs. Palmer lives in North Carolina. Mr.

Johnson lives in Tennessee. The Plaintiff lives in Wisconsin. The location of every other party

is unknown. Any courthouse in either Tennessee or North Carolina is more convenient to the

majority of the known parties in this case, so the balance of convenience does not favor

Wisconsin.

Turning to Mr. Johnson, the Plaintiff alleges five total contacts in the original complaint:

three emails, two phone calls, one voice mail message, and an unknown number of letters. Even

if we presume this is true, it is insufficient. For instance, in Vermont Yogurt Co. v. Blanke Baer

Fruit and Flavor Co., 107 Wis.2d 603 (Wis. App. 1982) , the defendant corporation (1) had a

regional sales representative whose territory included Wisconsin, (2) employed a part-time

salesperson, a resident of Wisconsin, to sell its products in Wisconsin, (3) used Wisconsin firms

to distribute its products, (4) advertised in national trade magazines, (5) did direct mailing to

Wisconsin firms, (6) sent technical personnel to Wisconsin to assist customers trying new

products, (7) attended trade shows in Wisconsin and reimbursed its Wisconsin distributors for

expenses incurred in attending such trade shows, and (8) derived 3% of its total nationwide sales


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from Wisconsin despite not being licensed to do business in Wisconsin or having any offices,

warehouses or manufacturing plants or owning any property in Wisconsin. However, these

contacts, which greatly dwarf the contacts in this case, were found to be insufficient in Vermont

Yogurt to support an assertion of jurisdiction under 801.05(1)(d).

Other examples of greater contacts being found to be insufficient abound in the case law.

In Commercial Financial Corp. v. McCaffrey, 197 Wis.2d 116 (Wis. App., 1995), that court

found that Wisconsin didnt have personal jurisdiction over a law firm that provided legal

services to some Wisconsin clients (while operating out of state). Surely that involved, at a

minimum, communications equivalent to three emails, two phone calls, a voice mail message

and an unstated number of letters. Likewise, in U.S. Venture Inc. v. McCormick Transp. LLC,

Case No. 15-C-990 (E.D. Wis., Nov. 3, 2015), this Court found that it didnt have jurisdiction

under 801.05(1)(d) over defendants who made three or four phone calls to Wisconsin, sent

three emails, and made an unspecified number of payments, id. at 9, to the plaintiff in that

case, a Wisconsin corporation. Similarly, a single visit to Wisconsin, and approximately $6,500

of sales in Wisconsin (in 1971 dollars) was insufficient in Nagel v. Crain Cutter Co., 50 Wis.2d

638 (Wis., 1971), while in Towne Rlty., Inc. v. Bishop Enterprises Inc., 432 F.Supp. 691 (E.D.

Wis., 1977) an unspecified number of telephone conversations and meetings in Wisconsin,

combined with signing an agreement in Wisconsin, was not sufficient to create jurisdiction in the

state. Finally, in Ricoh Co., Ltd. v. Asustek Computer, Inc., 481 F.Supp.2d 954, 963 (W.D. Wis.,

2007), the court found that a handful of local sales [of computers] does not qualify as

substantial activity, when neither defendant is alleged to have ever set foot in Wisconsin.

These are only a few of the many cases where a greater degree of contact was found to be

insufficient to trigger jurisdiction under WIS. STAT. 801.05(1)(d).


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Further, this Court doesnt have to assume the truth of every allegation in the complaint

when determining whether the Plaintiffs assertion of jurisdiction is appropriate. Attached as

Exhibit B is the Declaration of Eric Johnson, which states that he did not send any of the

complained-of emails or letters, that he only made one phone call, and that he only left one voice

mail message. Such allegations can be considered to rebut the complaint and, therefore, this

Court should consider Mr. Johnson as only having those two contacts with the state. Thus, the

allegations in the original complaint are not sufficient on their face, and when one considers only

those communications that have not been rebutted by Mr. Johnson, the basis of the Plaintiffs

assertion of jurisdiction becomes even weaker.

To apply the five factors to these facts, the quality and quantity of contacts is slight, the

source and connection of the cause of action with those contacts is anemic,2 the interests of

Wisconsin in the action is as slight as it is with Mrs. Palmer, and the balance of conveniences

favor Mr. Johnson for the same reason that they favor Mrs. Palmer. For all of these reasons, this

Court should hold that it lacks personal jurisdiction over both Mrs. Palmer and Mr. Johnson.

Moreover, the proposed amended complaint does nothing to cure these faultsin fact, it

alleges even less on the subject of jurisdiction in relation to Mr. Johnson than the original

complaint while continuing to allege no contacts in relationship to Mrs. Palmer. Indeed, the

Plaintiff fails to allege facts supporting an assertion of personal jurisdiction over a single

defendant. Therefore, it would be futile to accept this proposed amendment and, accordingly,

leave to amend should be denied. Instead, the entire case should be dismissed.

2 Indeed, as noted infra 11, neither of those communications were defamatory as a matter of law.


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B. This Court Doesnt Have Personal Jurisdiction Over the Defendants Under the Due Process Clause

Even if WIS. STAT. 801.05 were interpreted to allow jurisdiction over these Defendants,

the allegations are not sufficient to meet the standards of the due process clause.

In regards to Mrs. Palmer, the Plaintiff appears to believe that the mere allegation that she

wrote about him on the Internet to a general audience is sufficient to confer jurisdiction. It is not.

For instance, Young v. New Haven Advocate, 315 F.3d 256 (4th Cir. 2002) presents facts

similar to this case in nearly every relevant respect. That case involved two Connecticut

newspapers (and members of their respective staffs) that ran a corresponding website which

published articles that allegedly defamed a Virginia prison warden. That plaintiff attempted to

argue that Virginia could exercise jurisdiction over these Connecticut residents as follows:

the [defendants], knowing that [the plaintiff, the warden of a Virginia prison] was a Virginia resident, intentionally discussed and defamed him in their [newspaper] articles, (2) the newspapers posted the articles on their websites, which were accessible in Virginia, and (3) the primary effects of the defamatory statements on [the plaintiffs] reputation were felt in Virginia.

Id. at 261-62. However, the Young court found this was insufficient because there was no

evidence of any intent to target a Virginia audience:

As we recognized in ALS Scan, a persons act of placing information on the Internet is not sufficient by itself to subject[] that person to personal jurisdiction in each State in which the information is accessed. [ALS Scan, Inc. v. Digital Service Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002)]. Otherwise, a person placing information on the Internet would be subject to personal jurisdiction in every State, and the traditional due process principles governing a States jurisdiction over persons outside of its borders would be subverted. Id.

315 F.3d at 263. By the Young standard, there is nothing before this Court allowing it to

determine that the posts at issue were meant specifically for a Wisconsin audience, compared to

a national or even a global audience.


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Further, this standard has been adopted as the law of the Seventh Circuit. In Mobile

Anesthesiologists Chicago, LLC. v. Anesthesia Assocs. of Houston Metroplex, 623 F.3d 440 (7th

Cir., 2010), the Seventh Circuit faced a claim that a harmful website, visible in Illinois, subjected

out-of-state-defendants to Illinois jurisdiction. The Seventh Circuit rejected this claim in part by

citing Young as follows:

A plaintiff cannot satisfy the Calder [v. Jones, 465 U.S. 783 (1984)] standard [for personal jurisdiction] simply by showing that the defendant maintained a website accessible to residents of the forum state and alleging that the defendant caused harm through that website. See, e.g., Panavision International, L.P. v. Toeppen, 141 F.3d 1316, 1322 (9th Cir.1998) (We agree that simply registering someone elses trademark as a domain name and posting a web site on the Internet is not sufficient to subject a party domiciled in one state to jurisdiction in another.); Young v. New Haven Advocate, 315 F.3d 256, 264 (4th Cir.2002) (no express aiming where the defendant newspapers only contacts with the forum state were through websites aimed at an out-of-state audience).

Id. at 446. The act of writing on the Internet does not subject one to personal jurisdiction in

every state of the union. Indeed, a contrary ruling would likely create an inappropriate chilling

effect on protected speech, at the prospect of being haled into a court far from your home

which might be the Plaintiffs ultimate goal in this suit. If the Plaintiff is genuinely aggrieved by

anything Mrs. Palmer wrote, on the Internet, to a general audience, he needs to come to North

Carolina in order to bring suit.

Turning to Mr. Johnson, in terms of specific jurisdiction, the only contacts with the forum

do not relate to any cause of action. According to the Declaration of Eric Johnson, the lone

phone call consisted of two comments that were allegedly disparaging of Mr. Schmalfeldt,

whether true or not. First, he gave a general description of the skits attached as Exhibits 1-3 of

to the proposed amended complaint (ECF Nos. 6-2, 6-3, and 6-4) and, based on that description,

said that they were like child porn. An opinion based on disclosed facts is just that: an

opinion. Such opinions are protected by the First Amendment. Milkovich v. Lorain Journal Co.,


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497 US 1, 27 n. 3 (1990) (statements of opinion, based on disclosed facts, cannot support a

defamation claim). As for the voice mail, it simply referenced his opinion that Mr. Schmalfeldts

skits are like child pornography.

Turning back to the lone phone conversation, Mr. Johnson also denies the allegation in

paragraph 39 of the original complaint that he called the Plaintiff a terroristhe only noted that

Mr. Schmalfeldt is associated with the convicted terrorist Brett Kimberlin. See, e.g., Kimberlin v.

White, 7 F.3d 527, 528-29 (6th Cir. 1993) (detailing how Mr. Kimberlin bombed a town for

nearly a week, costing one man his life). The Plaintiff admits that he is associated with Mr.

Kimberlin, and, therefore, it cannot be defamation to state that the Plaintiff is associated with Mr.

Kimberlin because it is the truth.

As can be seen from the above, neither the phone call nor the voice mail is defamatory

and, therefore, neither contact relates to the cause of action. Further, in Nieman v. Grange Mut.

Cas. Co., Case No. 11-3404, at 18 (C.D. Ill., April 26, 2012), that court declared that [t]he

Court further holds as a matter of law that a single telephone interview with an Illinois citizen is

insufficient to establish specific personal jurisdiction. Further, Neiman held that the exercise

of such jurisdiction does not comport with traditional notions of fair play and substantial justice

and is contrary to the United States and Illinois Constitutions. Id. A phone call and a voice

mail message should not be sufficient in this case.

As for general jurisdiction under the due process clause, as stated in Edgenet, Inc. v. GS1

U.S. Inc., Case No. 09-CV-65, at 9 (E.D. Wis., June 27, 2011), this requires the defendant to

have such extensive contacts with the state that it can be treated as present in the state for

essentially all purposes, and [t]he contacts must be such that they approximate physical

presence. A phone call and a voice mail message should not be sufficient to assert general


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jurisdiction over Mr. Johnson. Again, if the Plaintiff has any genuine grievance against Mr.

Johnson, he needs to come to Tennessee to bring suit.

Further, the proposed amended complaint doesnt improve matters on this front. The

proposed amended complaint continues to fail to establish personal jurisdiction against any

defendant, rendering the proposed amendment futile. Therefore, this Court should dismiss the

original complaint for lack of personal jurisdiction, deny leave to amend and dismiss the entire

case.

III. THE COMPLAINT SHOULD BE DISMISSED FOR IMPROPER SERVICE

Rule 4(c)(1) states that [a] summons must be served with a copy of the complaint. As

demonstrated by the Declarations of both Mr. Johnson and Mrs. Palmer, that has not occurred.

Instead, the Plaintiff served on them what appears to be very faded copies of the summons and

copies of the proposed amended complaintwhich is not yet a valid complaint. See

Declarations of Sarah Palmer and Eric Johnson attached as Exhibits A and B. Because the

proposed amended complaint was not filed with a motion for leave to amend, it is possible this

Court might reject it out of hand. This is an additional reason to dismiss the complaint for these

Defendants.

WHEREFORE, this Court should dismiss the original complaint for all defendants based on a

lack of subject matter under Rule 12(b)(1); this Court should dismiss the original complaint for

lack of personal jurisdiction under Rule 12(b)(2); this Court should dismiss original complaint

for insufficient service of process under Rule (b)(5); this Court should further deny leave to

amend because it would be futile; this Court should dismiss the entire case; and this Court should

provide any other relief that is just and equitable.


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Tuesday, March 1, 2016 Respectfully submitted,

s/ Aaron J. Walker Aaron J. Walker, Esq. Attorney for Defendants Johnson and Palmer Va Bar# 48882 DC Bar #481668 P.O. Box 3075 Manassas, Virginia 20108 (703) 216-0455 (No fax) [email protected]

VERIFICATION I, Aaron Walker, state under penalty of perjury under the laws of the United States of America that the foregoing is true and correct and that all exhibits are true and correct copies of the originals.

Executed on Tuesday, March 1, 2016.

s/ Aaron J. Walker

CERTIFICATE OF SERVICE

I certify that on the 1st day of March, 2016, I served copies of this document on William

Schmalfeldt at 3209 S. Lake Drive, Apt. 108, St. Francis, Wisconsin 53235 by mail.

s/ Aaron J. Walker


EXHIBIT A

Case 2:15-cv-01516-NJ Filed 03/01/16 Page 1 of 3 Document 12-1


MILWAUKEE DIVISION


DECLARATION OF SARAH PALMER

1. My name is Sarah Palmer, and I make these statements based upon my own

personal knowledge. I am a resident of North Carolina. I am over 18 years of age, and if called

to do so, I am competent to testify that the contents of this declaration are accurate and true.

2. On Saturday, February 13, 2016, my grandsons caretaker informed me that while

I was away from home, a process server had visited and had left some legal papers for me.

3. The papers left with him were as follows: a document titled a summons and a

copy of the proposed amended complaint filed in this case (ECF No. 6). The summons

appears to be a genuine but severely faded copy of the original. There appeared to be no date or

seal.

4. This case involves several writings I placed on the internet. To the extent that I

have actually written any of the statements attributed to me, each of these writings was targeted

to the world at large and not to an audience in a particular state. None of them were targeted

toward Wisconsin. I have also sent one email to Mr. Schmalfeldt asking him to cease and desist


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from the stalking and harassing conduct that eventually provided the basis of a stalking/no

contact order I have obtained in North Carolina. Aside from that, I have never knowingly

emailed the Plaintiff while he lived in Wisconsin, I have never called him, I have never written a

letter, nor have I engaged in any other kind of directed communication targeting him. Further, I

have made no phone calls, sent no emails, and sent no letters to anyone else in Wisconsin.

I declare under penalty of perjury under the laws of the United States of America that the

forgoing is true and correct to the best of my knowledge.

Executed on February 23, 2016 in Reidsville , North Carolina .

(city) (state/territory)

s/ Sarah Palmer

(signature)


EXHIBIT B



MILWAUKEE DIVISION


DECLARATION OF ERIC JOHNSON

1. My name is Eric Johnson, and I make these statements based upon my own

personal knowledge. I am a resident of Tennessee. I am over 18 years of age, and if called to do

so, I am competent to testify that the contents of this declaration are accurate and true.

2. On Thursday, February 11, 2016, a process server visited my home and attempted

service in this suit. Such service consisted of: a document titled a summons and a copy of the

proposed amended complaint filed in this case (ECF No. 6). The summons appears to be

genuine but severely faded copy of the original.

3. This case concerns writings I have allegedly placed on the Internet. Any such

writings I have actually made were targeted to a general audience and to the world at large.

4. The Plaintiff also claims that I have sent letters to persons in Wisconsin

discussing the Plaintiff in defamatory or disparaging (but true) terms. I have never done so.

5. The Plaintiff also claims that I have sent a number of emails contained in Exhibit

12 to the original complaint (ECF No. 1-15) and Exhibit 4 to the proposed amended complaint


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(ECF No. 6-5). At least one of these emails appears to be sent by a websites contact form. I did

not send those messages.

6. The Plaintiff also claims that I have made a number of phone calls into

Wisconsin. I have only made two that contained any disparaging information about Mr.

Schmalfeldt: one which resulted in a conversation with a woman who identified herself as Cindy

Lopez, apartment manager for Juniper Court and Canticle Court, and a second call where I left a

voice mail for the same person.

7. With respect to first call, it was prompted by the fact that the Plaintiff had made

statements to the effect that his Internet radio broadcast was approved of by Juniper Court and

Canticle Court. I was concerned that if this was true, that it might expose the company to legal

liability and, if this was false, that they should be alerted to the misrepresentation. I do not recall

the exact words I used, but at one point, Ms. Lopez asked about the contents of the broadcasts to

which I objected. I accurately described them as containing skits in which underage boys were

engaged in sexual activity and stated that it was like child porn. In the same conversation, I

also stated that Mr. Plaintiff was associated with convicted terrorist Brett Kimberlin, but I did not

refer to the Plaintiff as a terrorist. The voice mail message was largely about other subjects, but

the only derogatory comment I recalled making about the Plaintiff in that message was to refer

back to my opinion that some of his skits were like child porn.

8. Indeed, writing this today, I believe it is reasonable to conclude that the Plaintiffs

skits are child porn, in that they are pornographic audio involving characters depicted as

children.


3

I declare under penalty of perjury under the laws of the United States of America that the

forgoing is true and correct to the best of my knowledge.

Executed on February 22, 2016 in Paris , Tennessee .

(city) (state/territory)

s/ Eric Johnson

(signature)


UNREPORTED OPINIONS

Provided under E.D. Wis. Civil L. R. 7(j)(2)

U.S. Venture Inc. v. McCormick Transp. LLC, Case No. 15-C-990 (E.D. Wis., Nov. 3, 2015)

Nieman v. Grange Mut. Cas. Co., Case No. 11-3404, at 18 (C.D. Ill., April 26, 2012)

Edgenet, Inc. v. GS1 U.S. Inc., Case No. 09-CV-65, at 9 (E.D. Wis., June 27, 2011)


U.S. Venture Inc. v. McCormick Transp. LLC (E.D. Wis., 2015)

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U.S. VENTURE INC., Plaintiff, v.

MCCORMICK TRANSPORT LLC and JOEL MCCORMICK, Defendants.

Case No. 15-C-990

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

November 3, 2015

Header ends here.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

Plaintiff U.S. Venture, Inc., sued Defendant McCormick Transport, LLC, for damages in the amount of $261,768 allegedly due U.S. Venture under a fuel oil purchase contract. Defendant Joel McCormick was sued under a personal guaranty he signed as a condition of the agreement between U.S. Venture and McCormick Transport. U.S. Venture is a citizen of the State of Wisconsin and Joel McCormick and both members of McCormick Transport are citizens of Michigan. Federal jurisdiction therefore exists under 28 U.S.C. 1332. The case is before the court on the defendants' motion to dismiss for lack of personal jurisdiction. For the reasons that follow, the motion will be granted.

FACTUAL BACKGROUND

U.S. Venture is a Wisconsin corporation with its principal place of business located in Appleton, Wisconsin and is engaged in the business of buying and selling fuel oil on the open market. (Compl. 2, ECF No. 1.) McCormick Transport is a Michigan business that transports fuel oil to customers in the State of Michigan. It operates entirely in Michigan and has no Wisconsin

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customers. Prior to May of 2014, Joel McCormick, acting as an agent of McCormick Transport, contacted U.S. Venture, apparently by telephone, to inquire about purchasing fuel oil. (Posanski Aff. 2, ECF No. 12-2.) On May 14, 2014, after this initial contact, Joel McCormick signed a contract authorizing his company to buy fuel oil from U.S. Venture at a terminal in Ferrysburg, Michigan. (Id. 4.) The first transaction under the contract was for the purchase of 42,000 gallons of fuel oil at a fixed rate. (Id.) Subsequently, similar orders were made on June 3, 2014, and July 14, 2014. (Id. 5, 6.) On July 14, 2014, Joel McCormick executed a personal guaranty on behalf of McCormick Transport, which allowed for the purchase of fuel oil on credit. (Id. 11.)

All contact between the parties was through e-mail, fax, and telephone calls. (Id. 8.) All invoices and payments were directed by McCormick Transport to U.S. Venture's offices in Appleton, Wisconsin. (Id. 9.) At no time did an agent of McCormick Transport visit Wisconsin for business related purposes involving U.S. Venture. (McCormick Aff. 7, ECF No. 8.) When a purchase of fuel oil was made, U.S. Venture would direct its open market purchase of the fuel oil to the Ferrysburg, Michigan terminal. (Id. 12.) The fuel oil that McCormick Transport purchased was not shipped from Wisconsin. Instead, it was sent to the Ferrysburg terminal via the Wolverine Pipeline where McCormick Transport was able to withdraw the requested amount and deliver it to various locations in Michigan. (Id.)

ANALYSIS

In a dispute over personal jurisdiction the plaintiff initially bears the burden of proving that jurisdiction exists. RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997). A federal court exercising diversity jurisdiction has personal jurisdiction over a defendant when a court of the state in which



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the federal court sits would have such jurisdiction. Id. In Wisconsin, there is a two-

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step process for determining whether personal jurisdiction exists over a non-resident. Kopke v. A. Hartrodt S.R.L., 2001 WI 99, 8, 245 Wis. 2d 396, 629 N.W.2d 662; Johnson Litho Graphics of Eau Claire, Ltd. v. Sarver, 2012 WI App 107, 6, 344 Wis. 2d 374, 824 N.W.2d 127. First, it must be determined whether Wisconsin's long-arm statute, section 801.05, confers jurisdiction over the defendant. Id. The statute "must be read broadly" and "liberally construed in favor of exercising jurisdiction." Lincoln v. Seawright, 104 Wis. 2d 4, 9, 14, 310 N.W.2d 596 (1981). If the long-arm statute by its terms confers jurisdiction, then the inquiry shifts to whether exercising personal jurisdiction over the party comports with the due process principles of "minimum contacts" and "traditional notions of fair play and substantial justice." Regal Ware, Inc. v. TSCO Corp., 207 Wis. 2d 538, 542, 558 N.W.2d 679 (Ct. App. 1996) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

Wisconsin's Long-Arm Statute

The first step in the analysis is to determine whether McCormick Transport and Joel McCormick are subject to personal jurisdiction under Wis. Stat. 801.05. U.S. Venture asserts that personal jurisdiction can be established under multiple sections of the statute. It specifically points to the following provisions:

(1) Local presence or status. In any action whether arising within or without this state, against a defendant who, when the action is commenced:

. . . (d) Is engaged in

substantial and not isolated activities within this state, whether such activities are wholly interstate, intrastate, or otherwise. . . .

(5) Local services, goods or contracts. In any action which:

. . .

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(b) Arises out of services actually performed for the plaintiff by the defendant within this state, or services actually performed for the defendant by the plaintiff within this state if such performance within this state was authorized or ratified by the defendant; or (c) Arises out of a promise, made anywhere to the plaintiff or to some 3rd party for the plaintiff's benefit, by the defendant to deliver or receive within this state or to ship from this state goods, documents of title,



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or other things of value; or . . . (e) Relates to goods, documents of title or other things of value actually received by the plaintiff in this state from the defendant without regard to where delivery to carrier occurred.

Although U.S. Venture references all of the above quoted sections of Wisconsin's long-arm statute, it offers no specific argument under any particular provision. Instead, U.S. Venture notes that Wisconsin's long-arm statute is to be "liberally construed in favor of exercising jurisdiction" and states in conclusory fashion that "it can be concluded that personal jurisdiction exists under numerous sections." (Pl.'s Mem. In Opp. at 4, 5.) U.S. Venture devotes most of its brief to the argument that the exercise of jurisdiction over the defendants would not offend due process.

The question of whether Wisconsin's long-arm statute confers jurisdiction over the defendant is not the same as whether the exercise of such jurisdiction would offend due process, however. Unlike many states, Wisconsin has not included in its statute a "catch-all" provision extending its reach to the full limits allowed under the Due Process Clause of the United States Constitution. Compare 735 Ill. Comp. Stat. 5/2-209(c) ("A court may also exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States."). Although Wisconsin regards compliance with the State's long-arm statute as "'prima facie compliance' with the due process requirements," Lincoln, 104 Wis. 2d at 10, the two are not the

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same and both requirements must be met.

Plaintiff's focus on the question of due process is nevertheless understandable in light of the Seventh Circuit's decision in Felland v. Clifton, 682 F.3d 665 (7th Cir. 2012). There the court stated that the two-prong framework that the Wisconsin Supreme Court had adopted for deciding whether a state court had personal jurisdiction over a non-consenting foreign defendant "should not be taken to imply that the long-arm statute limits the exercise of personal jurisdiction any more than basic considerations of due process." Id. at 678. "To the contrary," the Felland court explained, "the constitutional and statutory questions tend to merge; compliance with the Wisconsin long-arm statute creates a presumption that constitutional due process is satisfied, although the defendant of course has the opportunity to dispute personal jurisdiction on purely constitutional grounds." Id. "Once the requirements of due process are satisfied," the Felland court stated, "there is little need to conduct an independent analysis under the specific terms of the Wisconsin long-arm statute itself because the statute has been interpreted to go to the lengths of due process." Id.

But Felland dealt with a case that clearly fell within the provisions of Wisconsin's long-arm statute, as the court had "no trouble" concluding that the plaintiff had established personal jurisdiction under the "local act or omission" provision of the statute. Id. at 678-79 (citing Wis. Stat. 801.05(3)). Felland did not hold that Wisconsin courts exercise jurisdiction over foreign non-consenting defendants in cases that do not come within any subsection of its long-arm statute. To so hold would be to ignore the plain language of the statute and disregard the two-step approach for determining whether personal jurisdiction exists that Wisconsin courts continue to follow. See Rasmussen v. General



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Motors Corp., 2011 WI 52, 15, 335 Wis. 2d 1, 803 N.W.2d 623; Carlson v. Fidelity Motor Group, LLC, 2015 WI App 16, 8, 360 Wis. 2d 369, 860 N.W.2d 299. I

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therefore turn to the specific provisions of the Wisconsin long-arm statute cited by U.S. Venture.

Consistent with federal constitutional law, Wisconsin's long-arm statute addresses both general jurisdiction and specific jurisdiction. See Rasmussen, 2011 WI 52, 15; Nagel v. Crain Cutter Co., 50 Wis. 2d 638, 648-50, 184 N.W.2d 876 (1971). Specific jurisdiction applies when a foreign defendant has purposely directed his activities to residents of the state, and the litigation results from injuries alleged to have arisen out of those activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984)); Rasmussen, 2011 WI 52, 15. On the other hand, "if the defendant has 'continuous and systematic' contacts with a state, the defendant is subject to general jurisdiction there in any action, even if the action is unrelated to those contacts." Northern Grain Marketing, LLC v. Greving, 743 F.3d 487, 492 (7th Cir. 2014) (quoting Helicopteros Nacionales de Colombia, 466 U.S. at 416); Rasmussen, 2011 WI 52, 15 ("If general personal jurisdiction is accorded over a nonresident defendant, the defendant may be brought before Wisconsin courts for claims that are unrelated to the defendant's activities in Wisconsin.").

None of the specific jurisdiction provisions cited by U.S. Venture apply here. Subsection 5(b) applies where the claim arises out of a contract for services. Nagle, 50 Wis. 2d at 644. Here, the contract involved the purchase of goods, namely fuel oil, not services. Subsection 5(c) applies to contracts for the sale of goods, but only where the

goods are either delivered to or shipped from Wisconsin. Id. Here, the fuel oil was neither delivered to nor shipped from Wisconsin. It was purchased on the open market and delivered to Ferrysburg, Michigan. Finally, subsection 5(e) relates to goods, documents of title or other things of value actually received by the plaintiff in this state from the defendant regardless of where delivery occurs. Money payments, however, have been

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held not to constitute "other things of value" as contemplated by the statute. "The mere sending of money into this state, without more, cannot constitute a substantial minimum contact within the purview of due process requirements." Id. at 645.

U.S. Venture also cites section 801.05(1)(d), Wisconsin's general jurisdiction provision, as a basis of jurisdiction. Subsection (1) of section 801.05 authorizes the exercise of personal jurisdiction:

In any action arising within or without this state, against a defendant who when the action is commenced: (a) Is a natural person present within this state when served; or (b) Is a natural person domiciled within this state; or (c) Is a domestic corporation or limited liability company; or (d) Is engaged in substantial and not isolated activities within this state, whether such activities are wholly interstate, intrastate, or otherwise.

Wis. Stat. 801.05(1). U.S. Venture argues that the court has jurisdiction over the defendants because they "engaged in



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substantial and not isolated activities within this state."

The Wisconsin Supreme Court has said that section 801.05(1)(d) "corresponds in a general way to the 'doing business' statute common in other states, and presents a jurisdictional ground which is distinct from the specific sections of the long-arm statute . . . ." Nagel, 50 Wis. 2d at 646; see also Rasmussen, 2011 WI 52, 18 ("Pursuant to Wis. Stat. 801.05(1), Wisconsin courts may exercise general personal jurisdiction over a defendant when that defendant takes up 'local presence or status' within the state."). Section 801.05(1)(d) requires the court to look to the nature of the defendants' activities in Wisconsin to determine whether they were such as to constitute substantial and not isolated activities within the meaning of the statute. Nagel, 50 Wis. 2d at 646. In making

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this determination, Wisconsin courts consider five factors: "(1) the quantity of the contacts; (2) the nature and quality of the contacts; (3) the source of the contacts and their connection with the cause of action; (4) the interests of the State of Wisconsin; and (5) the convenience of the parties." Druschel v. Cloeren, 2006 WI App 190, 8, 295 Wis. 2d 858, 723 N.W.2d 430 (citing Nagel, 50 Wis. 2d at 648-50).

Upon consideration of the relevant factors here, I conclude that the defendants were not engaged in substantial activities in Wisconsin. There is no evidence that either the defendants or any agents or employees of the defendants ever physically entered Wisconsin in connection with their business or for any other reason. The defendants have no place of business, bank deposits, telephone, or telephone listing in Wisconsin. Their place of business is in Michigan and all of their customers are in Michigan. On three occasions, Joel McCormick telephoned U.S. Venture to purchase fuel oil at the Ferrysburg

terminal. U.S. Venture responded by sending him a written quote, and he accepted by sending an email confirming the order. The fuel oil was sent through the Wolverine Pipeline to a terminal in Ferrysburg, Michigan, without ever entering the State of Wisconsin. McCormick Transport drew the fuel oil from the terminal at Ferrysburg and transported it to various locations in Michigan again without ever entering the State of Wisconsin. McCormick sent payments to U.S. Venture's offices in Wisconsin.

From these facts, I cannot conclude that either McCormick Transport or Joel McCormick is doing business in Wisconsin to the extent needed to confer general jurisdiction over them under section 801(1)(d). They have not engaged in substantial activities in Wisconsin so as to make them present in the state. McCormick Transport's only contacts with the state consists of the three or four telephone phone calls to U.S. Venture's Appleton offices over a three-month period of time,

Page 9

sending three emails confirming the purchase order, the receipt of invoices from U.S. Venture's Appleton office, and an unspecified number of payments to U.S. Venture. Joel McCormick also apparently received a personal guaranty from U.S. Venture, which he signed and returned. Although the value of the fuel oil purchased by McCormick Transport is substantial, the defendants' actual contacts with the state are far less than those in Nagel where the court found that the out-of-state defendant was not engaged in substantial activities in Wisconsin.

In Nagel, the California defendant had no offices or place of business in Wisconsin, but its general manager had physically entered the State on its behalf. At the time suit was commenced, the defendant had been paying the Wisconsin plaintiff royalties for



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close to six years under a licensing agreement which gave the defendant the exclusive right to manufacture and sell plaintiff's patented carpet cutting tool. The defendant also had a separate agreement under which plaintiff agreed to manufacture and supply the defendant with blade components for the cutting tools. The case arose out of an alleged breach of the first agreement. 50 Wis. 2d at 641-42. Finding no jurisdiction for the alleged breach of contract claim under the specific jurisdiction provisions of the State's long-arm statute, the court turned to the question of whether jurisdiction over the defendant could be exercised under the general provisions of the statute. In concluding that it could not, the court noted that the Wisconsin plaintiff was the defendant's only customer in Wisconsin and the annual royalties had averaged less than $2,000 until 1969 when they grew to $4,500. With the single exception of the 1960 visit to the state, the court noted that all of the contact was by a mail order arrangement. The plaintiff's claim was unrelated to the defendant's activities in the State. Although Wisconsin had an interest in providing a forum for its citizens, the court noted that its interest was no different than any other state. Finally, the court noted that as to convenience, the mere fact that the agreement was

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to be governed by Wisconsin law was entitled to little weight in the absence of other contacts with the State. Id. at 648-50.

In this case, the defendants' long distance contacts with the Wisconsin plaintiff occurred over a far shorter period of time and related entirely to the delivery of goods that had never been in the forum state to a completely different state. This is not the kind of activity, either in quantity or quality, that can reasonably be expected to subject a foreign defendant to Wisconsin's general jurisdiction, as section 801.05(1) contemplates, based on the defendant's "local presence or status."

Finally, it should also be noted that subsection (1) requires the foreign defendant to be engaged in substantial activities in the state "when the action is commenced." At the time U.S. Venture filed suit, the defendants' activities in Wisconsin, limited though they previously had been, had ceased entirely. It thus follows that Wisconsin's long-arm statute does not confer jurisdiction over the defendants and their motion should therefore be granted.

CONCLUSION

U.S. Venture had the initial burden of proving personal jurisdiction. Even construing section 801.05 broadly, the facts here do not support a finding of personal jurisdiction under any of the provisions cited. Because the plaintiff has failed to establish that personal jurisdiction exists over the defendants under Wisconsin's long-arm statute, there is no need to delve into the due process prong of the analysis. Accordingly, the motion to dismiss is GRANTED, and the action is dismissed without prejudice. The Clerk is directed to enter judgment accordingly.

Dated this 3rd day of November, 2015.

s/ William C. Griesbach William C. Griesbach United States District Judge


Nieman v. Grange Mut. Cas. Co. (C.D. Ill., 2012)

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JASON LEE NIEMAN, Plaintiff, v.

GRANGE MUTUAL CASUALTY COMPANY, INTEGRITY MUTUAL

INSURANCE COMPANY AND CINDY HEINDEL, INDIVIDUALLY

AND AS AN EXECUTIVE OFFICER OF INTEGRITY MUTUAL

INSURANCE COMPANY; CRITERION EXECUTIVE SEARCH

OF FLORIDA, INC.; MICHAEL ("MIKE") TINGLEY, INDIVIDUALLY

AND AS AN OFFICER AND/OREMPLOYEE OF CRITERION

EXECUTIVE SEARCH, INC., Defendants.

No. 11-3404

UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF

ILLINOIS SPRINGFIELD DIVISION

ENTER: April 26, 2012

Header ends here. OPINION

RICHARD MILLS, U.S. District Judge:

Plaintiff Jason Lee Nieman has filed a Pro Se Complaint, wherein he asserts a number of claims pursuant to Title VII, 42 U.S.C. 2000e et seq., the Civil Rights Act of 1866, as amended, 42 U.S.C. 1981, and the

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Age Discrimination and Employment Act, 29 U.S.C. 621 et seq. The Plaintiff has also asserted claims pursuant to the Illinois Human Rights Act, 775 ILCS 5/1-101 et seq.. The Court now considers several Motions to Dismiss filed by the Defendants. Pending also are the Plaintiff's Motion for Sanctions and his Motion to Strike the Opposition of the Defendants to his Motion for Sanctions.

I. Motion of Integrity Mutual Insurance Company

Defendant Integrity Mutual Insurance Company ("Integrity") has moved, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the Plaintiff's Complaint. Integrity contends that Plaintiff cannot state a plausible claim for age discrimination or retaliation in violation of the Age Discrimination in Employment Act ("ADEA"), Title VII, 42 U.S.C. 1981, or the Illinois Human Rights Act ("IHRA").

At this stage, the Court accepts as true all of the facts alleged by the Plaintiff and draws all reasonable inferences therefrom. See Virnich v. Vorwald, 664 F.3d 206, 212 (7th Cir. 2011). "[A] complaint must provide a short and plain statement of the claim showing that the pleader is entitled

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to relief, which is sufficient to provide the defendant with fair notice of the claim and its basis." Maddox v. Love, 655 F.3d 709, 718 (7th Cir. 2011) (internal quotation marks omitted). Courts must consider whether the complaint states a "plausible" claim for relief. See id. The complaint must do more than assert a right to relief that is "speculative." See id. However, the claim need not be probable: "a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely." See Independent Trust Corp. v. Stewart Information Services Corp., 665 F.3d 930, 935 (7th Cir. 2012) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007)). "To meet this plausibility standard, the complaint must supply 'enough fact to raise a reasonable expectation that discovery will reveal evidence' supporting the plaintiff's allegations." Id. The allegations of a pro se plaintiff are more liberally construed than are complaints which are drafted by lawyers. See



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Alvarado v. Litscher, 267 F.3d 648, 651 (7th Cir. 2001).

Specifically, Integrity asserts that the claims it rejected the Plaintiff's employment action because of his age in violation of the ADEA (Count I)

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and the IHRA (Count VII) should be dismissed with prejudice because he cannot plead that Integrity actually knew his age when it rejected his application for employment. The Plaintiff does not plead that Integrity or Defendant Cindy Heindel, the Vice President of Human Resources, had actual knowledge of his age. Rather, the Complaint suggests that the Defendants were aware of the Plaintiff's age, based on the inclusion of the year he graduated from college (1989) on a business networking site. Integrity contends that Plaintiff never pled that it or Heindel actually reviewed his LinkedIn1 profile, had knowledge of the date he graduated from college, or that Integrity actually determined the Plaintiff's age.

Although Integrity claims that Heindel could not have reviewed his LinkedIn profile, the Plaintiff alleges in his Response that during telephone interviews, Heindel did inquire about and confirm the year that Plaintiff and the candidate who was selected for the position each earned their degrees. According to the Complaint, the Plaintiff's interview was

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conducted in February 2010. It is not difficult to determine that someone who graduated from college in 1989 probably was over the age of 40 in 2010. Given the Plaintiff's pro se status, the Court concludes that this is enough to place Integrity on notice that he is subject to the protection of the laws against age discrimination. The Plaintiff has also alleged that the candidate selected for the position

obtained his degree in 1994. A person who was 22 at that time would have been under 40 in 2010. At this stage, the pro se Plaintiff has also sufficiently alleged that employees outside the protected class were treated more favorably.

Integrity also alleges the Plaintiff's retaliation claims pursuant to Title VII (Count II), 1981, and the IHRA should be dismissed because the Plaintiff does not allege: (1) that Integrity actually was aware of his "protected activity;" and (2) the nature of his "protected activity." In his Complaint, the Plaintiff alleges that around October 2009, he became aware that an internet search "would provide specific information as to the Plaintiff, the prior action, the Defendants, and the nature of this case," which the Plaintiff refers to as his "protected conduct." See Compl. 20.

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The Plaintiff further alleges he "knows that it is highly common practice for employment recruiters, human resources professionals, hiring managers, and other related parties to 'Google' potential employees or job applicants." See Compl. 20.

Integrity contends that, based on this subjective assertion, the Plaintiff "presumes" every employer where he has applied for a job has learned of his protected conduct, "and in some cases would likely use it as an unlawful disqualification or discount factor as to his candidacy." See Compl. 20. Integrity further asserts that Plaintiff's Complaint references an exhibit which arguably suggests that Plaintiff filed a lawsuit against Nationwide Mutual Insurance Company. It contends that Plaintiff has not identified any "protected conduct" and that his conclusion that he engaged in such conduct is not enough to defeat a motion to dismiss.

The Plaintiff claims that although Integrity denies using the internet to research job applicants like him, it does not assert that



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it was not made aware of the alleged protected conduct by other means. The Plaintiff further suggests that Integrity's employment agent was somewhat aware of

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his previous protected conduct.

Integrity correctly argues that the allegations in the Plaintiff's Complaint which pertain to "protected conduct" are highly speculative. It appears that Plaintiff is alleging that any potential employer could possibly have learned of the Plaintiff's "protected conduct" by conducting an internet search and refused to hire him for that reason. It is unclear whether the Plaintiff has any basis for believing this other than a subjective belief. However, in considering a claim which the defendants argued made no sense and was based on "vague aspersions, conclusory statements, and supposed 'wrongful' conduct," the Seventh Circuit observed that those are matters to be considered at the summary judgment stage and not when ruling on a motion to dismiss. See Virnich v. Vorwald, 664 F.3d 206, 213 (7th Cir. 2011). This is particularly true given the Plaintiff's pro se status, The Court will Deny Integrity's Motion to dismiss the retaliation claims.

Additionally, Integrity contends that Plaintiff's claims it violated the IHRA (Counts VII and VIII) should be dismissed because Plaintiff failed to exhaust his administrative remedies under the IHRA and Integrity is not

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an employer under the IHRA.

Integrity asserts that Plaintiff's charge of discrimination, which is attached to the Complaint, was cross-filed with the EEOC and the Illinois Department of Human Rights. See Compl. 4. However, based on Exhibit A of the Complaint, Integrity alleges

that Plaintiff's charge of discrimination was cross-filed with the Wisconsin Equal Rights Division because Integrity is a Wisconsin employer and Plaintiff was applying for a job in Wisconsin. Therefore, Integrity argues that Plaintiff cannot pursue claims under the IHRA because of his failure to exhaust remedies.

In response, the Plaintiff claims that Plaintiff filed the original charge with the Chicago, Illinois office of the EEOC. Subject to its own discretion, the EEOC chose to transfer the matter to the Milwaukee, WI office for investigation. The Plaintiff points to 775 ILCS 5/7A-102(A-1)(1), which provides in part, "If a charge is filed with the Equal Employment Opportunity Commission (EEOC) within 180 days after the date of the alleged civil rights action, the charge shall be deemed filed with the Department on the date filed with the EEOC." Based on this language, the

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Plaintiff contends the charge was automatically filed. The IHRA does not require that a charge actually be investigated by the Illinois Department of Human Rights.

The Court is unable at this time to conclude that Plaintiff's claims under the IHRA are deficient and subject to dismissal.

Based on the foregoing, Integrity's Motion to dismiss will be Denied.

II. Motion of Defendant Grange Mutual Casualty Company

In support of its Motion, Defendant Grange Mutual Casualty Company ("Grange") has adopted and incorporated by reference each of the arguments set forth in Integrity's Memorandum in support of its Motion to Dismiss. To the extent those arguments are incorporated, Grange's Motion is Denied for the same reasons.



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Grange also asserts it should be dismissed with prejudice because the Plaintiff has not and cannot plead that Grange was his prospective employer. It cannot be liable for alleged employment discrimination by Integrity solely because the Plaintiff alleges that Grange is Integrity's owner and/or successor in interest. Each statute on which the Plaintiff relies

Page 10

requires that Grange act as the employer to have liability for employment-related decisions.

Grange contends that Plaintiff does not plead any facts tending to show that it was involved in Integrity's decision to reject the Plaintiff's employment application or that Grange otherwise acted as an "employer." It claims that Plaintiff alleges only that Grange is Integrity's owner and/or successor in interest and that one of its employees was involved in the EEOC investigation. See Compl. 8, 39. The allegation that Grange monitored and/or controlled Integrity's activities is, without more, a naked legal conclusion that is not sufficient to withstand a motion to dismiss.

Additionally, the Plaintiff's claims against Grange for violation of the ADEA (Count I), Title VII (Count II), and the IHRA (Counts VII and VIII) should be dismissed because the Plaintiff failed to name Grange in his EEOC charge. "[A] parent organization not named in the plaintiff's EEOC charge must be dismissed from the suit unless the plaintiff can show that the parent had notice of the claim against it, as opposed to its subsidiary, and had an opportunity to conciliate on its own behalf." Olsen v. Marshall

Page 11

& Ilsley Corp., 267 F.3d 597, 604 (7th Cir. 2001). The court in Olsen determined that the fact that the plaintiff showed that the parent

corporation had notice of the claim against the subsidiary and participated in the administrative proceedings on the subsidiary's behalf were alone insufficient to create a factual dispute to defeat summary judgment. See id.

In response, the Plaintiff alleges that he first recognized the name of Grange executive officer and in-house attorney, Beth W. Murphy, when he saw her name on the "Right To Sue" letter from the EEOC. The Plaintiff claims that he has recognized the "substantial connections" between Integrity and Grange since the EEOC charge was filed. He contends they are "integrated enterprises," and Grange has been on notice since the charge was filed. Moreover, a party not named in an EEOC charge may in some circumstances still be subject to suit. This exception to the general rule applies when "an unnamed party has been provided with adequate notice of the charge, under circumstances where the party has been given the opportunity to participate in the conciliation proceedings aimed at compliance." See Schnellbaecher v. Baskin Clothing Co., 887 F.2d 124,

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126 (7th Cir. 1989) (citation omitted).

The Plaintiff claims that Murphy was in position to know of the integration between the organizations. Moreover like Integrity, Grange had opportunities to participate in negotiations or conciliation yet refused those opportunities.

Although the significance, if any, of Grange's role in this case is not entirely clear, the Court concludes that Plaintiff has alleged sufficient facts at this stage to withstand the motion to dismiss. Because it is premature to resolve the factual disputes at this stage of the litigation, Grange's motion will be Denied.

III. Motion to Dismiss of Defendant Cindy Heindel



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The Plaintiff has asserted claims against Heindel for retaliation in violation of 42 U.S.C. 1981 (Count V) and the Illinois Human Rights Act (Count VIII), and age discrimination in violation of the IHRA (Count VII). Heindel alleges that the claims must be dismissed under Rule 12(b)(2) because the Court lacks personal jurisdiction over her. Heindel claims she does not have the systematic and routine contacts with Illinois to warrant

Page 13

general jurisdiction. Moreover, her lone telephone call to the Plaintiff, in response to the submission of his resume for a job in Wisconsin, is not enough for this Court to obtain specific jurisdiction over Heindel.

Heindel has submitted her Declaration as an Exhibit to her Motion. A court may receive affidavits in considering a motion to dismiss. See Nelson by Carson v. Park Industries, Inc., 717 F.2d 1120, 1123 (7th Cir. 1983). When there is a challenge to personal jurisdiction, the plaintiff bears the burden of establishing its basis for personal jurisdiction. However, the plaintiff is entitled to the benefit of the doubt if comparable levels of proof are advanced, whether by affidavit or another means. See id., see also International Steel Co. v. Charter Builders, Inc., 585 F. Supp. 816, 819 (S.D. Ind. 1984). A plaintiff's allegations as to personal jurisdiction are accepted as true, except where they are refuted by a defendant's undisputed affidavits. See Swanson v. City of Hammond, Ind., 411 F. App'x 913, 915 (7th Cir. 2011); see also International Steel Co., 585 F. Supp. at 819 ("If the party challenging jurisdiction provides affidavits in support of the motion to dismiss, the non-movant may not

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simply rest on the allegations of the complaint"). Any factual disputes in the affidavits are resolved in favor of the plaintiff.

See Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010).

The Plaintiff asserts that the Court has specific jurisdiction over Heindel pursuant to 735 ILCS 5/2-209(1), (2) and (7). The Illinois' long-arm statute stretches to the extent permitted by the due process clauses of the United States and Illinois Constitutions. See 735 ILCS 5/2-209(c). Heindel contends that Plaintiff cannot establish that subjecting her to personal jurisdiction in this Court is consistent with the due process clauses of either Constitution.

Heindel further asserts that, even if the Court has personal jurisdiction, the Plaintiff's claims should be dismissed under Rule 12(b)(6) because the IHRA does not provide for individual liability for age discrimination or retaliation and Plaintiff has failed to allege a retaliation claim against Heindel in violation of 1981. Therefore, Heindel contends the claims against her must be dismissed with prejudice.

"The nature of the defendant's contacts with the forum state

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determines the propriety of personal jurisdiction and also its scope-that is, whether jurisdiction is proper at all, and if so, whether it is general or specific to the claims made in the case." Tamburo, 601 F.3d at 701. In order for a court to have general personal jurisdiction over a defendant, the individual must have "continuous and systematic" contacts with the state, even if the action is not related to those contacts. See id. The threshold is high, to the extent that the contacts must be sufficiently extensive so as to approximate physical presence. See id. Occasional visits are not enough for general jurisdiction. See id.

As for specific personal jurisdiction, the defendant's contacts with the state must



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directly pertain to the challenged conduct or transaction. See id. at 702. "Specific personal jurisdiction is appropriate where (1) the defendant has purposefully directed his activities at the forum state or purposefully availed himself of the privilege of conducting business in that state, and (2) the alleged injury arises out of the defendant's forum-related activities." Id. The exercise of such jurisdiction must also be consistent with traditional notions of fair play and substantial justice as required by

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the Fourteenth Amendment's Due Process Clause. See id.

Heindel further asserts that even if Illinois courts had personal jurisdiction over her, the Plaintiff's claims are barred by the fiduciary shield doctrine because her alleged conduct was motivated by her employment interests and not her personal interests. See Rollins v. Ellwood, 141 Ill.2d 244, 280 (1990). Pursuant to Illinois' due process clause, it would be "unfair and unreasonable" to assert personal jurisdiction over an individual in such circumstances. See id.

Heindel asserts that, as Integrity's Vice President of Human Resources, she was assigned to contact candidates who might qualify for a Vice President of Claims job opening to determine if they warranted an interview at the company's Wisconsin headquarters. Pursuant to this directive, Heindel reviewed resumes and conducted telephone conferences with certain applicants to determine if Integrity should invite an applicant to Wisconsin for an interview. Heindel conducted a pre-interview telephone conference with the Plaintiff in or around February 2010. She rejected the Plaintiff as a viable candidate to continue with Integrity's

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interview process. Heindel states that she performed these duties on behalf of Integrity and did not have any personal interest in the selection of candidates to continue with the interview process. Moreover, Heindel does not own any shares or have any ownership interest in Integrity. Because her one telephone call to the Plaintiff was motivated entirely by her employment situation and not her personal interests, Heindel alleges the claims against her should be dismissed pursuant to Rule 12(b)(2).

The Plaintiff claims that he interacted with Heindel directly, in addition to her employment agents. He asserts that Heindel's contacts with the State of Illinois have been credibly pled as being more numerous and significant than she acknowledges. The Plaintiff asserts that her contacts with Illinois consist of more than a single telephone call to him in February 2010. These facts have not been stipulated by the parties. The Plaintiff asserts that the extent of Heindel's contacts with Illinois is a factual question which is yet to be resolved. He contends that it is inappropriate for a Defendant to insert extrinsic facts into the analysis at this stage of the proceedings. Therefore, the Plaintiff asserts that Heindel's argument is

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without merit.

Heindel has submitted a Declaration under penalty of perjury. According to the Declaration, Heindel's contacts with Illinois are extremely limited. Heindel has met her burden by refuting the Plaintiff's allegations. The Plaintiff has essentially rested on the allegations in his Complaint, which is insufficient to defeat Heindel's Motion once she has produced a Declaration. Accordingly, the Court concludes that general personal jurisdiction does not lie in Illinois.

The Court further holds as a matter of law that a single telephone interview with an



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Illinois citizen is insufficient to establish specific personal jurisdiction based on the claims in this case. Based on the allegations of the Complaint and record, the Court concludes that the exercise of such jurisdiction does not comport with traditional notions of fair play and substantial justice and is contrary to the United States and Illinois Constitutions. The Court further notes that based on the current record, it appears Heindel is also protected by the fiduciary shield doctrine.

Because Heindel submitted a Declaration detailing the extent of her

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contacts with Illinois, the Plaintiff cannot withstand the Motion to Dismiss by simply pointing to the allegations of his Complaint. The Court will Allow Heindel's Motion to Dismiss for lack of personal jurisdiction.

The Plaintiff has requested leave to amend his Complaint in the event of the dismissal of claims. Rule 15(a)(2) of the Federal Rules of Civil Procedure provides that a "court should freely give leave when justice so requires." However, the Court should not allow a plaintiff to amend his complaint when doing so would be futile. See Moore v. State of Ind., 999 F.2d 1125, 1128 (7th Cir. 1993). Because it would obviously be futile in this case, the Court will Deny the Plaintiff's Motion for Leave to Amend his Complaint as to the claims against Heindel.

IV. Motion to Dismiss of Criterion Executive Search and Tingley

Defendants Criterion Executive Search, Inc. and Michael Tingley, an executive recruiter for Criterion, have filed a motion to dismiss. They claim they lack sufficient contacts with Illinois and seek dismissal pursuant to Rule 12(b)(2). Alternatively, the Defendants seek dismissal for failure to state a claim pursuant to Rule 12(b)(6).

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(A)

The Defendants claim that Plaintiff has not alleged any basis for personal jurisdiction over Criterion or Tingley. In paragraph 10 of the Complaint, the Plaintiff alleges that Criterion is based in Tampa, Florida and conducts searches for various positions throughout the United States. In paragraph 11, he asserts that Tingley is a Criterion employee based out of Cincinnati.

In support of the motion to dismiss for lack of personal jurisdiction, relying on the affidavit of its Founder and President, Richard James, Criterion states it is an employment agency that is incorporated under the laws of Florida and has its principal place of business there. Criterion is not licensed, authorized, or registered to do business in Illinois. Criterion does not have an office in Illinois and does not own or rent any personal property in Illinois. It has no Illinois employees and does not conduct business in Illinois.

Tingley has also submitted an affidavit. According to the affidavit, Tingley works for Criterion at an office in Cincinnati, Ohio, where he has

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worked for 16 years. Tingley does not regularly work in Illinois and has no current Illinois clients. He states that he has not had any clients in Illinois since approximately 2007. His only contact with Illinois since 2009 has been the limited contact initiated by the Plaintiff when the Plaintiff called him. After the initial phone call, Tingley states that he and the Plaintiff exchanged emails approximately two times and talked three times on the phone.

In his Response, the Plaintiff asserts that he first met Tingley in 2001 when Tingley



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worked at another company and advertised a position with an Indiana entity. He claims that the two subsequently maintained a friendly professional relationship. Periodically, the Plaintiff would call the Defendant to discuss opportunities or industry happenings. He claims that he provided "leads" as to possible jobs or potential candidates several times from 2004 to 2011. The Plaintiff further asserts that Tingley also worked for the Plaintiff's prior employer and had some interactions pertaining to the general nature of the organization or jobs which Tingley was trying to fill. In December of 2007, Tingley contacted the Plaintiff to ask about a

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candidate, an Illinois resident, who Criterion was considering for a role. The Plaintiff claims that this latter assertion seems to contradict the pleadings and/or affidavit of Tingley, even though Tingley stated that he last had an Illinois client in approximately 2007.

The Plaintiff emphasizes that Criterion's website, www.cesfl.com, describes the company as a "national executive staffing and recruitment firm." The Plaintiff claims that, when he viewed the website, it included 85 positions, 22 of which were located outside of Florida though none from Illinois. The Plaintiff claims that he performed further internet searches, and discovered at one website two active job searches by Criterion for positions located in Illinois. On another website, the Plaintiff discovered another Illinois-based position which referenced Criterion's President as the contact. The Plaintiff contends that this information contradicts Criterion's assertion that it does not do regular business in Illinois. In a Response [d/e 32], the Defendants claim that the contact for one of these Illinois positions was a Pennsylvania company. As for the other two Illinois positions, Criterion states that it does not recall who was its client.

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According to the Affidavit of Richard James, both of those postings are over two years old and are not currently open.

The Plaintiff filed a Supplemental Response [d/e 31] to the Motion to Dismiss, wherein he has included an attachment referencing an Illinois Commercial Underwriting Officer position posted on another website by Criterion and/or Tingley. The Plaintiff claims that this information was likely posted in the last four to six months, which he alleges is inconsistent with statements offered in support of the motion to dismiss. The Plaintiff filed another Supplemental Response [d/e 33], wherein he claims that on March 23, 2012, he found another Chicago-based position advertised for Criterion.

Based on these assertions and the other factual allegations in the Complaint, the Plaintiff claims there is an insufficient basis to dismiss the claims against Criterion for lack of personal jurisdiction. Moreover, he asserts that Criterion used the websites in question to advertise the position at issue (with Integrity and/or Grange) throughout the country.

The Defendants contend that none of the exhibits relied on in the

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Plaintiff's Supplements establish that Criterion or Tingley were doing business in Illinois. Rather, the documents show only that they posted positions that were available in Illinois. They contend that in most instances, Criterion and/or Tingley had little or no contact with anyone in Illinois. In Tingley's affidavit attached to the Defendants' Response, he states that his client for the Commercial Underwriting Officer referenced by the Plaintiff was Colony Specialty Insu

ECF 12 Redacted

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Transcript of ECF 12 Redacted